Meanwhile, some variables turned negative, with capacity utilization, unfilled orders, finished goods inventories and hours worked contracting. Bucking this trend, capital expenditures rose, with the index increasing from -2.3 in July to +8.4 in August.

Pricing pressures remain, despite a decline in the index for raw materials prices from 34.3 to 23.2. This suggests continued, somewhat slower growth in prices at a time when the ability of many manufacturers to pass on these costs is limited. The index for prices received, for instance, fell from +4.6 in July to -0.5 in August, reflecting the need for some firms to lower prices in this market.

Despite the downgraded current picture, manufacturers remain positive about future opportunities, even with declines in many of the categories from July. The index for production and new orders in August, for example, is 25.4 and 26.7, suggesting an expectation of stronger growth in the next six months. Along these lines, measures for employment and capital expenditures were also higher.

Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.